Nader Hamid, Portfolio Manager with TWM Group at iA Private Wealth presents our video. You can also see this video in French by clicking here.

Portfolio Update – First half of 2026

In the first half of 2026, despite significant geopolitical developments and concerns about economic growth, corporate earnings remained solid, businesses continued to invest, and market gains extended beyond a handful of large companies. This meant positive market returns.

That said, with inflation remaining structurally higher than it was over the previous decade (and likely to remain so), staying invested, particularly in assets like equities, continues to play a very important role in preserving purchasing power and building wealth.

U.S. Economic Growth

Economic growth in the U.S. was driven largely by unprecedented private-sector investment in technology, particularly artificial intelligence. The scale is remarkable. In 2026, the Magnificent Seven alone are expected to invest about US$725 billion in capital expenditures, primarily to expand AI infrastructure.

To put that in perspective, that’s roughly 2.2% of the entire U.S. economy. Just three years ago, it was about 0.6%.

This wave of investment didn’t just support economic growth. It also helped drive corporate earnings across a wide range of industries. At the same time, a meaningful slowdown in AI-related investment would represent a challenge to both the economy and financial markets.

Market Leadership Broadens

During the first half of the year, the broader U.S. equity market advanced even as the Magnificent Seven underperformed by more than 10%. For example, Tesla shares declined 6.5% in the first half of 2026, while Meta and Microsoft fell 14.5% and 22.5%, respectively.

Historically, that has been relatively uncommon. This year’s performance reflects healthier market participation, with gains extending beyond large technology companies into sectors such as industrials, financials, and semiconductor-related businesses.

For long-term investors, broader market participation is encouraging. Rather than relying on a handful of companies, market returns are being supported by a wider range of industries and businesses.

Inflation Is Moderating, But May Settle at a Higher Level

Inflation has moderated significantly from the highs reached after the pandemic. However, several long-term structural factors suggest inflation is likely to stabilize above the low levels experienced during much of the 2010s. As a result, we do not expect interest rates to return to the exceptionally low levels that supported past booms in areas such as real estate.

One important factor is persistent government fiscal deficits. Many developed economies continue to spend significantly more than they collect in taxes, supporting economic growth but also contributing to a higher inflation and interest rate environment.

Our Portfolio Perspective

Although market sentiment can influence prices in the short term, long-term equity returns are ultimately driven by businesses’ ability to grow earnings.

Current consensus estimates project double-digit earnings growth for both Canadian and U.S. companies in 2026. In Canada, resilient banks and commodity prices continue to support earnings, while innovation and productivity remain key drivers in the United States.
Your portfolio maintains broad exposure to businesses in both of these markets that generate earnings and create long-term economic value, directly contributing to preserving and building purchasing power over time. 

We continue to complement equities with other asset classes to manage risk and provide resilience across a range of market environments.

On behalf of the TWM Group, thank you for your trust and see you next time.